What it is:
A vendor note is a short-termto a customer.
How it works (Example):
Let's say you plan to purchase lender.from Company XYZ for $2 million. You only have $200,000 in and want to pay Company XYZ over time for the rest. Essentially, you’re borrowing $1.8 million from the seller, and the seller is "carrying a " until you pay back that $1.8 million. The seller charge interest that may be a rate that is lower, the same as, or higher than what the buyer might get from a bank or other
Why it Matters:
Vendor notes are a great way to acquire vendor's perspective, it may not be paid for a right away, but receiving the over time is often better than not receiving it at all (plus the earned interest). When vendors sell high-price items such as cars to auto dealers or medical equipment to hospitals, vendor notes become a crucial advantage., but they usually require a solid relationship between the buyer and seller. From the
In some cases, new buyers are especially dependent on vendor notes if they cannot qualify for bank or other financing to acquire .